Sure I would throw in a few bitcoin - if it's not hosted somewhere that will end up with an fbi badge on it.

Dwolla is ok but it's US only. Create a platform that anyone can use to host their own - like a franchise, with a shared order book and agents in different countries. This makes it modular and more decentralized.

Mmmm, a franchise or licenseable system is an interesting idea as well.

How about a US dollar-based credit union which also offered USD/BTC exchange services?

Users would be required to verify their identity and maintain a minimum US dollar CD accounts at the credit union. Users could also maintain demand deposits for trading purposes. Deposits would be made via US dollar checks and wire transfers like a normal bank.

The union would offer a limited number/currency amount of free transfers between demand deposits held by users. These transfers would facillitate BTC/USD trades between users. The union would provide USD escrow for these transfers. The union could allow members to handle BTC escrow independently through clearcoin. The availability of demand deposit transfers would be proportional to the CD account deposited at the union. Excess transfers would incur USD fees.

The union could earn revenue to pay salaries by loaning out US dollar CD deposits and through fees on excess transfers.

Regulatory compliance might be easier because the credit union would have verified all the users identity and would operate similarly to a normal USD credit union. The only thing special is that all the users would be bitcoin enthusiasts. Also, nothing about the union would require it to ever touch BTC or directly facilitate BTC trading, since BTC escrow and order books could be handled by other entities. If holding BTC is a legal issue in the US, this might be a way to get around it.

I will not be continuing this idea. With tradehill, and a couple of other very competitive-looking exchanges, as well as the potential legal ramifications of running one, it's just not something I want to get in to right now.

However, it's still a very viable idea for anyone else who wants to see another exchange out there. So go for it!